Here is an excellent new piece from NPR's always-engaging Planet Money team about the recent upswing in coffee prices. It echoes several themes I articulate in my recent monograph, Fair Trade? Its Prospects as a Poverty Solution, especially the reasons why short-term coffee prices can be quite volatile. They even mention that coffee "demand is inelastic!"

August 23 - The price of coffee beans hit a 12-year high today. I thought there might be some kind of reclusive-hedge-fund-guy-corners-coffee-market story, like we saw with cocoa earlier this summer.

But the main driver of coffee prices right now is more prosaic: Colombia has had a few years of weak coffee harvests because of too much rain, which has reduced the global supply. And coffee drinkers keep buying coffee, even as prices rise (in other words, demand is inelastic). . . .

Sunday, August 22, 2010

Author and businessman Matt Ridley argues that life is getting better despite the recession. NewsHour economic correspondent Paul Solman finds a case of optimism with Ridley, built in part upon Ridley's latest book,The Rational Optimist.

Wednesday, August 18, 2010

I spent a week at Princeton Theological Seminary for a summer seminar on the role of Christian thinking on the American Revolution. It was an enriching experience in many ways, not the least of which was the coffee. Because PTS is an institution of the Presbyterian Church (USA), a politically progressive and in some ways trendy denomination, all the coffee was guaranteed righteous. There was social justice in every cup. You see, Presbyterian coffee, of the mainline variety, is fair trade coffee, and so it feels especially good going down.

But feelings aren’t everything. Victor Claar has written a helpful little book for the Acton Institute, Fair Trade? Its Prospects as a Poverty Solution, that cuts through self-congratulatory emotions and lays out the economic sources and constraints of their situation. . . .

According to the U.S. Department of Labor's Bureau of Labor Statistics, there are nearly 31 million people currently unemployed -- that's including those involuntarily working parttime and those who want a job, but have given up on trying to find one. In the face of the worst economic upheaval since the Great Depression, millions of Americans are hurting. "The Decline: The Geography of a Recession," as created by labor writer LaToya Egwuekwe, serves as a vivid representation of just how much. Watch the deteriorating transformation of the U.S. economy from January 2007 -- approximately one year before the start of the recession -- to the most recent unemployment data available today.

Monday, August 16, 2010

Much of the recent talk about an economic recovery concerns what shape it will take — literally. Will the plunge and rebound conform to the "V" shape that described the 1973–74 recession, be akin to the "U"-shaped recovery seen after the 1981–82 recession, or sputter into the dreaded "W" — twin recessions (the much-discussed "double dip") that keep the economy on the ropes for years?

We asked eight leading economists to get graphical with us and describe what shape they believe will ultimately win out. We present them here in descending order of optimism, if for no other reason than because to do the reverse would guarantee that you don't finish reading the article. And we give the last word to one economist who offers a refreshing dose of humility regarding his profession's ability to predict what lies ahead.